There was a 30 per cent reduction in the value of global regulatory fines between 2023 and 2024, as Fenergo, the digital client lifecycle management (CLM) solutions provider, reveals the latest findings from its annual report on global financial institution enforcement actions.
Fenergo found that while globally, there was a decline in value from $6.57billion to $4.6billion between 2023 and 2024, the Asia Pacific (APAC) region saw a much steeper drop in value. In 2023, it saw $1.41billion in regulatory penalties, whereas, in 2024, the total penalty value was only $32.1million: a 98 per cent decrease.
However, this trend was not seen across the entire APAC region. Due to Singapore‘s tightened compliance measures and enforcement actions, the existing trend of growing regulatory fine values continued throughout 2024. In 2021, the total value was $748,693; in 2022, it was $818,329; in 2023, there was a huge 228 per cent increase bringing the total value of regulatory fines to $2,681,162. In 2024, the new total value for regulatory fines increased once again by 22 per cent to a grand total of $3,281,066.
A deeper look into Singapore
Apart from greater regulatory scrutiny of Singapore’s financial institutions and industries, this increase has also been influenced by factors such as increased technology adoption by regulatory bodies and subsequent efficiency gains.
Looking specifically at Singapore, Fenergo revealed that fines were predominantly in relation to AML/ KYC and transaction monitoring (TM) breaches in 2024. These penalties totalled $1.84million and $1.43million respectively.
TM violations were not an issue in Singapore exclusively. They also dominated the global landscape in 2024 with a total of $3.3billion in fines issued. This was followed by KYC fines ($105million) and anti-money laundering (AML) ($1.19billion), with ESG as an emerging area with a value of $37.69million.
The future of Singapore’s regulatory sector
Rory Doyle, head of financial crime policy at Fenergo commented on the findings, predicting that in 2025, the Singapore market can expect more investigations and enforcement action: “Learning from the financial scandals in late 2023, and with the formation of private-public partnerships such as COSMIC Singapore regulators and Finance Intelligence Units (FIUs) now have access to more data. This allows them to identify issues more efficiently, and act more quickly in cracking down or mitigating breaches from occurring.
“As China tightens control over nefarious financial activity, particularly with its new regulatory framework for crypto, there will be a potential outflow of funds to other economies such as Singapore. This emphasis on regulation or investigation on crypto also means that traditional fund transfers may become the more popular means of fund outflow into Singapore.
“With this knowledge, we anticipate that MAS will be more vigilant, not just with scrutiny and enforcement action on violators, but to ensure that all companies stay ahead of the curve and comply. MAS has historically been very cautious and fair with their penalties, but as the year-on-year increase in fines indicates, they will be sounding a clarion call to the market by issuing more punitive fines in 2025.
“With the shift in focus globally on the banking sector and in response to recent scandals, we foresee a surge enforcement action in Singapore across all financial services sectors. It is in the best interest of financial institutions to deploy robust infrastructures for AML thus streamlining processes for KYC, suspicious activity reporting and transaction monitoring. This will ultimately reduce the risk of financial crime and mitigate costly enforcement action and reputational harm.”
Where was there the most enforcement action?
The largest enforcement action of the year, $3.18billion, was levied against TD Bank by US regulators for deficiencies in its TM systems. Across APAC, penalties for AML and ESG violations were the most significant in value.
The most punitive fine issued for AML breaches in APAC was issued by the People’s Bank of China (PBOC) at $3.9million to Zhejiang Aerospace Electronic Information Industry. In Australia, the Australian Securities & Investments Commission (ASIC) led the charge globally with landmark fines for ESG breaches to Vanguard ($8.8million) and Mercer ($7.4million)
In other regions, North America maintained its position as the most punishing region for regulatory fines, with a total of $4.33billion in penalties issued in 2024—a modest decline of 15 per cent compared to 2023.
Still, while the total value of fines declined globally, there were variances in each region.
In the EMEA region, fines increased by 170 per cent rising from $75.96million to $219.2million, while in the UK, fines rose sharply by 156 per cent, from $25.26million to $64.74million.
Banks are in hot water
Segment-wise, there is a marked shift with emphasis on traditional financial institutions, with banks incurring fines of $3.65billion as compared to digital assets ($762.9million), evidence that banks are being subject to increasing regulatory scrutiny globally.
